This study will examine four key issues: (1) race and gender differences in the correlates of dementia, particularly focusing on morbidity processes that are associated with dementia in its varied forms; (2) race and gender differences in health care service utilization and health care costs among those suffering from forms of dementia; (3) the influence of socioeconomic contexts and the availability of health services on morbidity processes leading to dementia, and health care costs; (4) the impact of contexts of consumption of alcohol and tobacco on morbidity processes leading to dementia and on health care costs. Data: The study will examine a 2.5% random sample of HCFA beneficiaries from 1996-2000 in the states that make up the census designation of the South (N=275,000). Our contextual level analyses on 1425 counties in the South will examine the impact of socioeconomic conditions, the availability of medical services in the area, and alcohol and tobacco consumption. We will estimate a variety of multi-level hierarchical models for logistic regression models, multinomial logistic regression models, and linear models that incorporate the influence of socioeconomic contexts and other factors into predictions of morbidity, service utilization and health care cost of individual beneficiaries. Significance: The proposed work will generate several important contributions: (1) It will help identify how race and gender differences in heart disease and stroke influence the onset of dementia, and how these processes may differ between vascular/multi-infarct dementia and Alzheimer's disease; (2) It will elucidate how race and gender variations in morbidity processes leading to dementia impact health care service utilization and health care costs. (3) It will allow us to discern if contextual factors such as socioeconomic inequality and health care availability influence the development of dementia and its effect on healthcare outcomes (service utilization and costs); and (4) It will allow a systematic assessment of the influence of contexts of alcohol and tobacco consumption on the development of dementia and its influence on health care service utilization and costs.